In Tidewater, Va, for example, black women who once were lucky if they could get a maid's job at $50 a week now make more than $100 a week in food processing plants. The plants are advertising for still more workers.

New minimum wage coverage and more and more unionization have also pushed up labor costs. Only a few weeks ago cotton mill workers unionized the J. P. Stevens & Co. Inc., plant in Roanoke Rapids, N. C., a step that will almost certainly have far‐reaching impact on Dixie's Inige, antiunion textile industry.

Like the diminution of the cheap labor pool, such a develAfter Decade of Robust Growth opment was probably inevitable in the so‐called “New South” that is becoming more and more like the rest of the country. Says Prof. Donald Ratajczak, an economist who heads the Georgia State University Economic Forecasting Project.

“A good part of the rapid inflation the South is experiencing today is a ‘catch‐up', a oneshot deal. We were behind everybody else. Now we're catching up.

“Some business and capital is being driven off. But over the long run the South will survive. It still offers special advantages in taxes, zoning and weather.”

As for the unemployment spiral, construction has paced much of the South's growth, providing thousands of jobs. Before the current economic downturn began, about 40 per cent of all new housing was being built’ in the South.

But tight money has drastically curtailed building, forcing many workers onto the street. In ‘Atlanta, perhaPs the South's most bustling city during the heyday of the Dixie business boom, housing starts are down more than 40 per cent.

Pessimism From Banker

Kirk P. Lynn, a senior vice president of Citizens and Southern Bank of Atlanta, recently told the Georgia Association of Realtors:

“The industry is in very serious trouble. Unless something’ dramatic occurs, the rest of 1974 and perhaps most of 75 will he very, very, tough.”

The actual level of unemployment in the South is still lower than the level nationally, 5.1 per cent to ‘5.6 per cent. However, a year ago, before the construction squeeze, the gap was even wider, 4.4 per cent to 5 per cent.

The inflation statistics are similar. Though the South is still the cheapest place to live —a New Yorker needs $1.12 to buy what an Atlantan gets for $1.00—the gap is narrowing.

Miami Business ‘Stalled’

Two years ago, prices went up 3.4 per cent nationally but only 3 per cent in the South. Last year, the trend reversed. Prices went up 9.6 per cent in the South but only 8.8 per cent nationally.

This year, the reversal is expected to continue. The Bureau of Labor Statistics projects that prices in the South will go up 13.6 per cent while prices nationally will rise 12.8 per cent.

Such dismal figures are eliciting predictable concern from Virginia to Florida to Texas.

One Federal economist who recently attended a private seminar on, the South's business problems described the gathering as “the., most pessimistic ever.” He said, for example, that a Florida banker I had reported that business it the Miami area was “stalled in its tracks,“ with more than 9,000 condominiums on the market.

In Atlanta, there is a persistent rumor that one of the city's big, aggressive bank is in serious trouble.. Addressing that rumor, one well informed businesman said privately: “That's overstating the case. The bank is secure. But it's going to take a good bath because of overextension. It's been a long time since I've seen so many develop so close to bankruptcy.”

A report from the Sixth District Federal Reserve Bank, in Atlanta, supports the businessman's observation. The report states coldly.

“Business failures have risen well above year‐ago levels, with the increase centered in retail and construction firms.”

The South's economic woes seem to have replaced football as the No. 1 topic of conversa tion, a sure indicator of the seriousness of the problem.

In the airport at Charlotte, N.C., traveling salesmen grouse endlessly in front of the bank of pay telephones. It now costs 20 cents to call a local customer.

At a cocktail party in one of Atlanta's fashionable suburbs, two women sip martinis on patio and trade ideas on how to spice ‘up a beef dish made from “those cheaper cuts.”

Even moonshiners are feeling the squeeze. North Carolina revenue agents report a steady decline in the number of arrests for illegal liquor manufacLuring. They say the decline is, in inverse proportion to they steady rise in the price of sugar, a primary ingredient in moonshine.

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A version of this archives appears in print on September 22, 1974, on Page 1 of the New York edition with the headline: After Robust Decade, South's Growth Lags. Order Reprints|Today's Paper|Subscribe